When I first read about CBDCs I thought "WTF?" aren't fiat currencies already digital? I guess it takes a lot more than one glance at the devil to realize we knew so little of its ways in the beginning.
Wanna hear something funny? Well, it most likely won't sound funny so here goes:
I was right, fiat has already been digital but CBDCs was never about "digitizing" Fiat.
The move to create a central bank digital currency was never about digitizing fiat, nor financial inclusion or any of those publicized lame talks about the "potentials" of a central bank digital currency. Instead, CBDCs came as a fight against crypto and its growing dominance in digital payments and other emerging digital finance operations.
A House Of Cards
The American TV series "House of Cards" was a political drama revolving around Frank Underwood, a ruthless and cunning politician portrayed by Kevin Spacey, who, along with his equally cunning wife, Claire Underwood, played by Robin Wright, seeks power and influence in Washington, D.C. The show explores their manipulative and often immoral tactics to climb the political ladder.
ChatGPT
The word there is "manipulative".
When we call CBDCs the "House Of Cards", we are saying that it is simply a manipulative structure that is designed to do nothing new or more than manipulate the financial system. Surely, not every country is quickly jumping on this one because it isn't a piece of cake to assemble the right puzzle pieces that would allow the establishment to have the necessary influence over the broad finance landscape without any power threatening hiccups.
How do we know this?
Because the US is slow to implement it. As with many others.
Federal Reserve Governor Michelle Bowman has voiced her skepticism over the implementation of a central bank digital currency (CBDC) in the U.S., citing potential risks to the country's economic structure. Speaking at a Harvard Law School event on Tuesday, Bowman argued there were no compelling reasons to suggest a CBDC could better address financial frictions than existing solutions such as FedNow. Launched by the Federal Reserve, FedNow facilitates instant transactions and expedites daily payments, providing users with same-day fund access and notably aiding small businesses in managing cash flows without delays.
Bowman also highlighted the risks posed by stablecoins to investors and the broader banking system due to their deficits in security, stability, and regulation compared to traditional money forms. Her views echo those of Federal Reserve board member Christopher Waller who, at a separate Brookings Institution event, labeled CBDCs as "nothing revolutionary" compared to the existing banking system. He emphasized that the perceived benefits of a digital dollar remain unclear and would necessitate changes in U.S. law and Congressional approval. Investing.com
Now someone would think, why are the Feds skeptical about a system that would give them more influence over the finances of the world?
Ever heard the saying "If it ain't broken, don't try to fix it"?
Surely the Feds influence of money isn't "yet" broken. Why should they rush to implement a system that would cause the majority of their activities to be close to the eyes of the world?
Notice that they moved to criticize stablecoins right after stating their skepticism over CBDCs? That's simply the right cards to play, instead of trying to build what your competitors are clearly better at, attack them from afar with critics.
Houses Built On Cards
Normally, this should still read "House Of Cards" but have a different meaning than the first but for more clarity, we go with "Houses Built On Cards".
Card Stacking: In a broader sense, the term "house of cards" can refer to a precarious situation or a plan built on a weak foundation, much like a structure made of playing cards. If one element fails, the whole thing can collapse.
Mr ChatGPT
Notice the last sentence: If one element fails, the whole thing can collapse.
This is exactly the situation with CBDCs. It is simply a house of cards - as in a manipulative structure - while at the same time is also a house built on cards - as it is largely exposed to a collapse given being built on a weak foundation.
The foundation here is simply to attack its forerunner, crypto. And what do we know about business ventures that are developed via card bets on an attack on existing businesses? It never has a smooth ride.
Coming into business simply to attack and eliminate an existing business is all the wrong there is in business - this mindset affects a business's chance at growing to win.
CBDCs are exposed to massive failures and the world knows this. I mean, let's look at countries that have developed and deployed one, yeah? How's that going? In Nigeria for example, it's total shit, nobody cares about its existence and it definitely won't entice people to flee from crypto.
This is the reality of Central Bank Digital Currencies(CBDCs).